On November 1, we announced the financial results for the second quarter of this fiscal year.

In the first quarter from April to June, thanks to your flexible response to customers' orders, we were able to achieve results that exceeded our plan.

However, in the second quarter from July to September, the production cutback of automobiles expanded due to the shortage of semiconductors and other factors, and our operating conditions became more unsettled, which placed a heavy burden on our employees.

I would like to express my sincere gratitude to all of you for your hard work and dedication to your daily work despite this situation.

On the other hand, the prices of raw materials, mainly steel, have risen sharply.

Since we will not be able to pass on the price hikes to our sales prices until later, our profits have been greatly affected.

Net Sales: 208.4 billion yen (+24.6% compared to the same period last year)

Business Profit: 0.1 billion yen (−￥7.5 billion compared to the same period last year)

Profit attributable to owners of the parent company: −¥3.5 billion (−¥12.7 billion, comparing to the same period last year)

While the automotive products division has been struggling due to the harsh external environment, the general industrial products division has been doing very well and generating profits.

As for hydraulic hoses, while demand for construction machinery has slowed down in China, we have been able to capture demand for industrial machinery other than construction machinery, and exports are recovering in Japan.

Precision components for printers, which had been in a difficult situation, are continuing to recover due to remote work and other factors.

Seismic damping systems for buildings and houses, which are related to social and environmental infrastructure, are also contributing to supporting our earnings.

Revision of Full-Year Financial Forecast for FY2021

We have revised our full-year forecasts for the current fiscal year in conjunction with the announcement of our second quarter results.

Consolidated net sales: 455.0 billion yen

Business profit: 6.0 billion yen

Net profit attributable to owners of the parent company: -4.3 billion yen

As for the second half of the fiscal year, while we will continue to be affected by production adjustments due to shortages of semiconductors and other products, as well as soaring raw material prices, we also expect automakers to recover their production volume.

Therefore, based on the production information and forecasts currently available, we have revised our full-year business forecast.

Companies' strength is put to the test when there are large fluctuations in production, such as production cuts and increases.

I sincerely ask that each division continues to make appropriate investments while assessing the level of importance and urgency so that you can respond flexibly to changes in the situation.

We are in the midst of very difficult times, but there is no need to be pessimistic.

Let's use this as an opportunity to grow into an even stronger Sumitomo Riko Group by working on "transformation to a Solid Management Structure" that can generate profits even under such a severe external environment.

Dear all Employees

I know it is very difficult to adjust and respond to increases and decreases in production.

It is precisely at times like these that we must not forget to put "safety first" and "S.E.C.Q." (Safety, Environment, Compliance and Quality).

hese problems, once they occur, can cause trouble not only for you and your family, but also for all stakeholders, including customers.

In particular, recurrence of the same problem as in the past absolutely must not happen.

If you see any risk of an outbreak, please report it immediately to your supervisor in "Bad News First".

And supervisors will have to take the report as "Bad News Thanks" and try to resolve the problem as quickly as possible before it becomes a big problem.

There are only two months left in 2021.

Let's face our daily work with the spirit of "Banji-Nissei", placing importance on communication.

2021.11